The Spectrum Act requires that the FCC “reimburse costs reasonably incurred by” broadcast television licensees that are reassigned to new channels, as well as by multichannel video programming distributors (“MVPDs”) that incur costs related to continuing to carry the signals of broadcast stations moving to a new channel.

The Spectrum Act provides $1.75 billion to be expended for reimbursement payments to involuntarily repacked broadcasters. It also mandates that the FCC make all reimbursement payments within three years of the completion of the incentive auction. Of the broadcast stations that may be reassigned to new channels during the incentive auction repacking processes, only full power and Class A licensees are eligible for reimbursement. Winning incentive auction bidders that remain on the air and incur relocation costs because of their winning bid option (i.e. stations that move from UHF to low or high VHF, high VHF to low VHF, or “sharee” stations that move in order to share a channel with another licensee) must pay for their own relocation costs. Broadcasters assigned new channels in the repacking process that apply for and receive a flexible use waiver of the FCC's service rules will also forgo reimbursement for their relocation costs.

Procedures

Procedures

The FCC will reimburse broadcasters and MVPDs by providing initial allocations of funds based on their estimated costs and the amount of funds available followed by one or more additional allocations, to the extent necessary, prior to the end of the three-year reimbursement period. All entities seeking reimbursement will be required to provide an estimate of their eligible channel relocation costs after the incentive auction. The FCC has authority to borrow $1 billion from Treasury when the incentive auction closes in order to make initial allocations to broadcasters and MVPDs immediately following the close of the auction, before the agency collects payment from wireless auction winners. Subject to fund availability constraints, the Media Bureau will issue NCE broadcasters initial allocations equivalent to up to 90% of their estimated costs eligible for reimbursement, and all other eligible broadcasters and MVPDs initial allocations equivalent to up to 80% of their estimated costs eligible for reimbursement. Prior to the end of the three-year reimbursement period, the Media Bureau will issue a final allocation, if appropriate, based on broadcasters’ and MVPDs’ actual documented costs. The Commission has adopted the reimbursement form as well as a catalog of eligible expenses; the form and final catalog will be available online soon.

Finally, in order to provide transparency, the FCC will make disbursement amounts and claims for reimbursement (minus actual invoices and cost documentation, as well as the name of the vendor providing the equipment or service) publicly available. The Commission will also validate data and conduct audits and site visits in order to guard against waste, fraud, and abuse of these public funds.